Personal Loans

When it comes to personal loans they are a type of loan that can easily be obtained by anyone as long as they can prove they have a form of income and meet the age requirements as well. Usually, the money needs to be paid within a month after the lending process has been over with and the interest rates are quite high. To get approval credit checks are also not a requirement, so SFA (Simple, Fair, Affordable) Personal Loans are fairly easy to get and hurdle free.

Individuals who experience a cash crunch can easily delve into getting one such type of loan, yet there is also a word of caution. Borrowers who are inexperienced might abuse this type of loan and in the end get to lose more money than they can afford paying back, through interest rates. Depending on where the money is loaned from, the APR can go from three hundred percent to six hundred percent.

It’s not that such loans are bad and they should never be considered, but the fact is they can easily get out of control. Even though their contribution to someone’s financial need is undoubted, there is always the risk of things getting out of control.

Below there are seven tips that people interested in such loans should be mindful of:

1. The borrower always gets a sum lower than the amount written on the check, because the amount is subjected to fees ranging from fifteen to fifty dollars per one hundred dollars.

2. In case the borrower cannot repay the money in time, he’ll be encouraged by the lender to renew the loan. It’s a risky thing to do, so it’s advised to refuse such temptations.

3. State regulations can cover for these types of loans but they require the loan term limit to be set at thirty days. Lenders trick the system and set the amount to thirty one days, so the borrower will depend on the lender.

4. Such loans should be considered only in emergencies. Even if in the beginning this seems like a cheap option to get fast cash, borrowers might in the end let their loans pile up and in the end face the harsh reality of having very high fees to pay.

5. The SFA (Simple, Fair, Affordable) Personal Loans are usually aimed at people with a low income. The lenders have no idea that they could easily have problems in paying the money back and thus even be persuaded to apply for a new loan and get deeper into the pit.

6. There are some loan websites out there that will automatically have a loan “rolled over” and then have the renewal fee withdrawn on the due date. Even if it sounds crazy, some websites will also require the borrowers to sign a contract in which they stipulate that no legal actions will be taken against the lenders and that they won’t file bankruptcy. These are all aimed to protect the lender.

7. Lastly, it’s pretty easy to get used to these loans, so anyone should be careful on how and when they contract them. It’s best though that they’re left as a last resort in emergency cases.

Getting SFA (Simple, Fair, Affordable) Personal Loans is rather easy but everyone should be well informed before contracting one. There are potential risks that can really knock people off financially and they should be carefully analyzed before proceeding further with the loan.